Deceit Charge Halts Sale of Cadman Towers Co‐ops

State Attorney General Louis J. Lefkowitz ordered a halt in sales of apartments in a cityaided Mitchell‐Lama project in Brooklyn Heights yesterday,, pending an investigation of complaints by purchasers that they had been deceived.

Brooklyn. District Attorney Eugene Gold and City Investigation Commissioner Robert K. Ruskin said they also were investigating the charges.

Earlier in the day, purchasers of apartments and two Councilmen and two Assemblymen from Brooklyn aired their charges at a news conference in the rotunda at City Hall.

They alleged that as late as last August, apartments in the project — Cadman Towers, at Henry and Clark Streets—were being sold on the basis of two‐year‐old prospectus containing outdated and erroneous information.

Robert Schiffman, chairman of the Cadman Towers Cooperators Association, said members had been sold apartments with the assurance that the cost would be $1,000 a room, with monthly carrying charges of $51.66 a room.

These figures, he said were in a prospectus issued when sales began two years ago. Meanwhile, he charged, officials of the Housing and Development Administration have known for more than a year that the costs would be much higher, but concealed this information from prospective purchasers.

“We learned by accident, only 48 hours before it was presented or approval by the Board of Estimate last October, that H.D.A. proposed to increase the mortgage from $14,849,000 to $20,686,400,” Mr. Schiffman said.

“This would mean that carrying charges would soar to $85.20 per room—far beyond the means of most of the original purchasers,” Mr. Schiffman declared. “This isn't middleincome housing, this is luxury housing.”

“We have been induced to invest our savings—or money we borrowed, and are paying interest on—in a ‘middle‐income’ project under false pretenses,” Mr. Schiffman asserted.

He said the cooperators were engaging an accounting firm to audit the books of the contractor and sponsor to determine why construction costs had risen so high.

“Apparently each apartment in Cadman Towers will cost $49,000 to build,” he said. “Luxury housing only costs $42,000 to $48,000 per dwelling unit today—with no subsidy from the city.”

Mitchell‐Lama housing for middle‐income families is built with city or state aid under state law providing for longterm, reduced‐interest loans and tax abatement. Cadman Towers, which is to have 420 apartments, is being built solely as a city‐aided project, under the supervision of H.D.A.

The Mitchell‐Lama law, passed in 1955, specified that the housing be available only to families of fewer than four persons with an income less than six times the rent or monthly maintenance, or families of four or more with incomes seven times the monthly charge.

Mr. Schiffman said that families with incomes up to $50,000 a year would be eligible to buy apartments in Cadman Towers if the proposed rise in the mortgage was approved by the Board of Estimate.

Councilman Leonard Scholnick, Brooklyn Democrat, who attended the news conference, asked: “Who needs H.D.A. to build apartments at this cost, for people with high incomes? We are subsidizing the wrong people.”

James Robinson, a young architect who has bought one of the apartments, said luxury housing designed by his firm was being built for $47,000 unit.

Rise Confirmed

The project is being built by Cauldwell‐Wingate, under the sponsorship of Cadplaz Corporation whose controlling principal is listed as Jack. Fisher in the prospectus, but the cooperators declared at the news conference that the real principal was Max Mishkin, and that his wife and son, Michael, an attorney, had been active in selling the apartments.

Officials of Cauldwell‐Wingate could not be reached for comment last night.

A spokesman for the H.D.A. confirmed that an application had been made to the Board of Estimate to increase the mortgage from $14,849,000 to $20,686,400.

He denied that the agency had been a part of an attempt to mislead the purchasers, and said they had a right to withdraw, and obtain refunds, without penalty. He said the increased mortgage was needed because of rising costs, which H.D.A. had continually audited.,

Councilman Kenneth Haber, a Liberal, and Assemblymen Martucello, both Democrats, joined the co‐operators at the news conference in charging that H.D.A. had been a party to misleading them and concealing facts about rising costs.

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A version of this archives appears in print on November 24, 1971, on Page 18 of the New York edition with the headline: Deceit Charge Halts Sale of Cadman Towers Co‐ops. Order Reprints|Today's Paper|Subscribe